Guy Barnett, managing partner of Midlands firm Blakemores, won the show jumping Welsh Masters Championship 2009 – despite being on his second string horse, a Danish Holsteiner called Aragon (pictured). Apparently his first choice, Joli Coeur, suffered an ‘unlucky rub’ in an earlier round. Barnett, appropriately, specialises in equine law.
I see that that venerable London institution, the London Evening Standard, is becoming a freebie after 182 years of Londoners paying for it. The most interesting comment on this came from the Standard’s editor Geordie Greig: ‘I think the digital generation have got used to not paying for information.’ In stark contrast, I often hear solicitors say that their websites should give just enough information away to tempt prospective clients to want (and pay for) more, but that telling them any more would be ‘giving away the Crown jewels’. Get real folks, have you looked in the crypt recently? The Crown jewels have long gone. Mr Greig is spot on. The younger generation have never known a life without the internet – it is ingrained in them that all of life’s mysteries can be explained if you’re imaginative with Google, Wikipedia and the like. Whether or not this is true is beside the point; people believe it to be the case, so it is. The older members of the so-called younger generation aren’t so young any more. They are becoming today’s, not tomorrow’s, private and commercial clients and their expectations are way beyond most firms’ traditional means of dispensing advice and legal services. If your firm insists on trying to keep legal knowledge a secret, be sure that a competitor not far from you will not. The new breed of client will seek out free information and guidance and when they really need the skill that only a solicitor can provide, they are more likely to go to a firm that attracted them in the first place through a helpful online presence. The Standard is changing, and so are the (pun intended) times.
China offers business opportunities for UK law firms of all sizes, not just the magic circle, the Law Society’s head of international told the Gazette this week as a Chancery Lane delegation visits the country on a joint mission with the Bar Council. Representatives of the two professions are visiting Shanghai, Hangzhou and Guangzhou to promote English law and encourage closer cooperation between the countries. The Bar Council contingent will also go to Shenzhen. London firm Rosenblatt and national firms Mills & Reeve and Hammonds have accompanied the delegation, along with representatives from Zhonglun W&D Law Firm, the first Chinese firm to open in London. Alison Hook, head of international at the Law Society, said there was scope for small, medium-sized and regional firms to develop practices in China. ‘The sheer size of the Chinese economy means it offers vast business opportunities, not just for big City firms, but for firms of all sizes, and in innumerable practice areas from commercial to property work,’ she said. Hook added that most foreign law firms that have opened are concentrated in Shanghai and Beijing, but there are more than 10 second-tier cities in China with populations of over 13 million. ‘These rapidly developing industrial hubs are attracting a growing number of foreign companies and potential business for law firms which might not have a presence in China but can see the huge opportunities on offer,’ she said. The modern legal profession only came into being in China just over 10 years ago, and despite its huge population there are currently only around 130,000 lawyers and 11,000 law firms. Hook said that because the legal profession in China is relatively new, many local firms are small and may want to consider establishing links with small and medium-sized foreign firms. Meanwhile, the European Commission has warned the Bulgarian government that it could face action in the European Court of Justice if it fails to address concerns that its national rules on the establishment of EU lawyers breach European law. The Law Society has raised concerns over the issue with the Bulgarian authorities during the past year.
In response to Mr Moore’s letter ‘What is the point?’ I am sorry he sees little point in his job as a solicitor – I love mine and see a great deal of point to it. I am not motivated however, to work in an ivory tower of the ‘only profession’ that could convey property or write a will. As he says, there are years of study required and a ‘struggle’ to get the coveted training contract. Law is a profession, and this process is necessary to ensure only those that make the grade get through. It’s the same with every other respected profession – or seven years of study for medicine and architecture. Nothing good comes easily. As an environmental lawyer I love my work: it stimulates and interests me; is constantly varied; and I enjoy helping clients to understand environmental legislation. I work with an excellent team of people in an outgoing, forward-thinking law firm. I am constantly challenged to learn new aspects of both law and the environmental industry. I take satisfaction from the fact that clients do still require my expertise Mr Moore says law is one of the most stressful jobs with the longest working hours. Yes, a few times I have had to work until 11pm on witness statements, been a bit tired and not got home for dinner on time. But my job isn’t as stressful as that of a friend of mine, a doctor, who physically collapsed with exhaustion after 36 hours on a ward. Mr Moore also fails to mention that law is one of the most well paid professions. I am sorry Mr Moore values being a solicitor by whether you can get £4.35 for swearing an affidavit or not. Personally, I value my job as a solicitor by the work I do, the clients I have and the colleagues with whom I work. Maybe this answers his question? Dr Anna Willetts, Greenwoods, Peterborough
Cheshire firm Chafes has hosted temporary recruits at its Wilmslow office over the past week. Two scarecrows, named Mike and Dave by staff, have been somewhat precariously ensconced on a ledge outside the firm’s first-floor office. Their arrival is not, as one might imagine, linked to problems of the avian variety, nor to demonstrate a fondness for children’s TV character Worzel Gummidge. In fact, Wilmslow has staged its first Scarecrow Festival to brighten up the town. Sharp-eyed readers will notice that the Chafes scarecrows are seated at a desk and even have their own PC. Let’s hope they are meeting their billing targets.
Firms in the assigned risks pool that have not paid their premiums by October will be closed down, the Solicitors Regulation Authority said today as it unveiled a tough new enforcement programme to clamp down on ‘financially unstable’ firms in the pool. The SRA said that by the end of the month it would contact all ARP firms that have not paid their premiums to inform them that they ‘must pay promptly’. Those that fail to do so will face ‘regulatory sanctions, and/or court action, and/or will be declared ineligible for any further term in the ARP and closed down’, the SRA said. SRA board chairman Charles Plant said that ‘by October, any firms whose position has not been resolved by these processes will face the immediate likelihood of intervention to close them down’. Steps will also be taken to ensure that firms that are reaching the end of their maximum two-year term in the ARP will have left the pool by October. Law Society president Linda Lee commented: ‘We welcome this decision, which should reduce the costs of the ARP, which are ultimately borne by the profession, help to create a more affordable solicitors’ PII market and improve protection for the public. The Law Society has been calling for a more rigorous management of the ARP for sometime and we will be providing extra funding to enable the SRA to implement the new measures effectively. The Society will work closely with the SRA to ensure that the measures are implemented in a way which is fair both to firms which are currently in the ARP and to the wider profession.’ The ARP is the insurer of last resort for firms that cannot obtain insurance on the open market. The pool charges punitively high premiums, which many firms in the pool fail to pay. The move to take action against ARP firms that do not pay their premiums will be welcomed by insurers, which fund the cost of the ARP in proportion to their share of the solicitors’ indemnity market, and pass this cost on to the profession. However, there are some concerns that the enforcement could have an adverse impact on ethnic minority firms that entered the ARP because they were unable to obtain insurance on the open market due to possible discrimination by insurers. Ethnic minority firms comprise 11% of law firms overall, but make up 41% of firms in the ARP. Plant said: ‘Compulsory professional indemnity insurance is an essential part of the existing safeguards of the current arrangements to protect consumers of legal services. ‘While it is right that firms experiencing difficulty in obtaining insurance should be given some assistance to do so, it is wrong that firms that are financially unstable or pose a significant risk should be propped up.’ There are currently 213 firms in the ARP, but this figure is expected to rise following what is expected to be a difficult renewal for firms this October.
As it is now less than a year until the non-legal big brands are permitted to begin their grab for high street legal services next October, those areas of work that are reserved (more or less) exclusively for solicitors are beginning to seem increasingly precious in the eyes of the profession.It is no surprise, then, that the latest bid by an accountancy body to gain the right to license its members to apply for grants of probate is being met with a certain degree of unease by solicitors. Indeed, research by the Institute of Chartered Accountants in England and Wales (ICAEW), the accountancy body in question, suggests that if accountants were able to exercise these rights, take up would actually be fairly high at the smaller end of the beancounters’ profession. As Patricia Wass, chair of the Law Society’s private client section, told the Gazette last week, the concern for lawyers is not the fact that accountants may be able to perform this specialist area of work, but that they may become entitled to do so without undergoing the rigorous level of qualification achieved by solicitors. She says: ‘We have long known that we will face competition from alternative business structures, and we know that we can’t stop non-lawyers making these applications. ‘What worries us is that we may not all be competing on a level playing field. ‘There are strict rules for solicitors who undertake probate work, and we want to be sure that new entrants to the market are governed by the same regulations.’ The Law Society had serious concerns over a previous application for a probate licence by the ICAEW, which it withdrew because at the time it would have meant that the body would have to contribute towards the Legal Services Board’s set-up costs. The Law Society claimed that that first application did not provide adequate consumer protection. No doubt Chancery Lane will be scrutinising this second application just as closely when it is submitted. But ultimately the decision will rest with the LSB, which may be impressed by the potential benefit to accountancy clients of obtaining a seamless service without the need to instruct a solicitor. Visit the Gazette’s blogs page for more news blogs
The profession seems to keep dreaming up ideas to make its own life a bit more difficult. This week I had to go to a Midlands town and arrived at a shopping precinct next to the station. There were two stalls in the middle of the mall offering legal advice. One was offering general legal advice and one helping with compensation claims. These were not unqualified advisers but solicitors’ firms setting up their stall. I wonder what shoppers would think of this as they made their way through the shopping centre past alternative medicine kiosks, fish pedicures and fake imitation handbags retailers. Is this what we have come down to? No of course not, but this is one face we put forward to the public. I read recently in the national press that the average solicitor’s bill for a compensation claim is £1,500, which sounds correct, and the average payment to a referral company is £900.00. I do not know if that is right or not but I have no reason to doubt it. Why do we do this when it is so difficult to get work that pays anyway? I went to a meeting organised by the Legal Services Commission. The discussion moved to matter starts, which is one of the ways the LSC tries to control costs. It limits the number of files that solicitors (now called providers) can open. The speaker said that if every firm asked for the numbers of matter starts it needs then everyone would be fine. Yes of course there would be enough to go around, but sadly people do not act in that way. A few bid for too many and the profession as a whole suffers. I am used to stories about criminal clients being paid a few pounds to be interviewed, other clients ‘selling’ their charge sheets, and prisoners and hospital patients expecting cigarettes. We seem to be encouraged to give out free gifts such as pens and calendars. It is very difficult to resist this pressure. The stall I mentioned in the shopping centre had a sign offering £200 to be paid to clients who are signed up. It does not particularly bother me if firms want to pay referral fees for work if they think that is what is best for them. But unfortunately it is the whole profession that suffers. I am always tempted to go up to these stalls and tell them some really obscure scenario, or say I have a cast iron case, the third anniversary is tomorrow and can I have my £200 please.
A case concerning the standard of advice expected from a newly qualified solicitor in a brief, free, consultation with a distressed client is set for a retrial following an appeal court decision. In Padden v Bevan Ashford, the Court of Appeal overruled a trial judge’s decision last year to throw out a negligence claim against a south-west law firm on the grounds that it would have imposed a ‘wholly unreasonable standard of care’ on solicitors giving free advice to clients who walk in off the street. In 2003, Heather Padden learned that her husband was a fraudster who owed £200,000. She was told by his solicitor that the only way to save her children from seeing their father go to prison was to sign over her interest in the house, so that he could repay the money. The solicitor told Padden to seek independent legal advice ‘for the sake of formality’, but to ignore any advice not to sign. In a distressed state, Padden was turned away by two solicitors before Rebecca Shinner, a newly qualified solicitor at what was then Bevan Ashford in Tiverton, agreed to see her. During a meeting lasting no more than 15 minutes, Padden outlined her situation and Shinner advised her not to sign. When Padden said she still intended to do so, Shinner commented: ‘I hope your husband is worth it’. Shinner did not charge Padden for the session. A few weeks later, Padden took the relevant documents to Bevan Ashford’s Exeter office, where partner Gary Mackay witnessed their signature and certified that the consequences had been explained. Padden subsequently sued Bevan Ashford, claiming it had failed to advise her properly. The trial judge threw out the claim after the first day of her evidence, finding that she had not established any breach of duty by the law firm. He said that to ‘foist’ a duty to give full advice ‘on a solicitor who simply agreed to see someone off the street without an appointment [is] an absurdity’. To expect Ms Shinner to do more, in a short, free session, than to tell Padden not to sign, would ‘impose a wholly unreasonable standard of care on the solicitor’. But in the Court of Appeal last month, Master of the Rolls Lord Neuberger found the trial judge had been wrong to ‘write off’ Bevan Ashford’s role at the second meeting, and had been ‘overimpressed’ by the fact that Padden’s consultation with Shinner was short and free of charge. Neuberger said solicitors in such circumstances were under a duty to advise that a short consultation was inappropriate, and further investigation was needed. He said Padden might well have chosen not to proceed had she learned that in reality her husband, who was sentenced to five years’ imprisonment in 2005 for obtaining £2m by deception, was unlikely to avoid incarceration. The case has been remitted to Bristol District Registry for retrial. Bevan Ashford demerged in 2004 to form two firms, Ashfords and Bevan Brittan. Ashfords is acting as solicitors to Bevan Ashford in defending the claim; Bevan Brittan has no involvement in the case. Read Rachel Rothwell’s blog on the case.
Practice – Summary judgment – Entitlement to summary judgment In 1999, the claimant, SHL, owned the freehold title of land that was the former site of the Prices Candle Factory (the site). At that time, SHL was owned 100% by RS and from May 2004 was a 100% subsidiary of SCL, whose share capital was owned entirely by RS. SHL applied to the local planning authority for planning and redevelopment permission of the site and in May 1999 entered into a ‘section 106 agreement’ with the authority under which £1m was to be deposited in an escrow account against certain of its obligations under the agreement. The agreement was varied by a further agreement dated 22 September 1999 (the September agreement) and replaced by a new agreement concluded in May 2001 under which it was stipulated that the £1m deposit would be held pursuant to the new agreement. Pursuant to the September agreement, £1m was deposited with the defendant bank (the bank) to be held in a joint account in the joint names of SHL and WBC operated under the terms of a joint mandate contained in identical forms executed by SHL and by the authority. In about October 2004, the bank was told either by RS acting on behalf of SHL or by SHL’s solicitors, acting on instructions conveyed by RS on behalf of SHL, that the names of the joint account should be changed with SCL replacing SHL. That change of name was in contemplation of a forthcoming transfer of the site from SHL to SCL which would render SCL an obligated party under the section 106 agreements. In December 2004, the title to the site was transferred from SHL to SCL. In July 2007, SHL’s members resolved to place the company into creditors voluntary liquidation. If the change of name on the joint account was a valid act by the bank, the result was that SHL’s rights in the £1m under the account were transferred to SCL. SHL contended that the change of name had not been validly executed by the bank, since there had been no written instructions for the change of name given on behalf of SHL. Accordingly, SHL contended that it was entitled to a declaration that the bank was indebted to it on the account in the sum of £1m. The bank applied for summary judgment against SHL. It contended that RS demonstrably had the actual authority of SHL to issue the change of name instruction and accordingly the bank had validly changed the name of the account, it being common ground that did not challenge the change of name implemented by the bank. It followed that SHL’s claim had no real prospect of success. The application would be granted. If a bank acted on an instruction given on behalf of a company that did not conform to the applicable mandate, it made legal and commercial sense that it should take the risk that the individual giving the instruction had not had conferred on him by the company authority to give the instruction. Where, however, authority to give the instruction had been conferred by the company, it would make little commercial sense to subject a bank which acted on the instruction to the risk that the individual was acting in breach of duty to third parties. A fortiori where for all practical purposes the company and the individual were effectively but one entity (see  of the judgment). Whilst it was arguable that RS was in breach of duty to SHL’s creditors in instructing the bank on behalf of SHL to change the name on the account, it did not mean that RS did not have actual authority quoad the company for the purpose of establishing that the bank was entitled to act on his instruction. RS was indisputably the directing mind and will of SHL. He was the effective owner, through his ownership of SCL, of the whole of SHL’s share capital; he was also a director of SHL when the instruction was first given and remained a director throughout 2005. It followed that as between RS and the company, the bank’s customer, RS was authorised to give the instruction he gave, and since the bank had no notice, actual or constructive, of any breach of duty to SHL’s creditors and LBW made no complaint of breach of mandate, the bank ought to have been treated as having been entitled to act on RS’s instruction, even though the instruction did not conform to the requirements of the mandate (see ,  of the judgment). There was no real prospect of SHL’s claim against the bank succeeding and the bank was entitled to summary judgment against SHL (see  of the judgment). London Intercontinental Trust Ltd v Barclays Bank Ltd  1 Lloyd’s Rep 241 considered. Senex Holdings Ltd (in liquidation) v National Westminster Bank plc: Queen’s Bench Division, Commercial Court (Mr Justice Field): 6 February 2012 William Edwards (instructed by Charles Russell LLP) for the claimant; Andrew Mitchell QC (instructed by DMH Stallard LLP) for the defendant.